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Record Planted Area Makes Record Corn & Wheat Prices Drop

June 30, 2011 at 21:36 by Vladimir Vyun

Corn and wheat slumped today as planted area reported by the US Department of Agriculture was bigger than estimated by analysts.

US farmers planted 92.282 million acres of corn this year, 1.8 percent above analysts’ estimates and the second biggest area planted by corn since 1944. US inventories were 3.67 billion bushels as of June 1, 12 percent above predicted amount. As much as 13.627 million acres were planted by spring wheat, 2.6 percent higher than forecasts. Stockpiles were 861 million bushels as of June 1, beating market expectations by 4.6 percent.

Cheaper corn, used for feeding cattle, may result in meat prices drop. Corn also used for production of ethanol, so lower prices for the grain may translate in lower fuel prices.

December futures for delivery of corn dropped by the exchange limit of $0.3 (4.6 percent) to $6.205 per bushel by 13:15 on CBoT, the biggest decline since November 16. September futures for delivery of wheat slumped by the limit of $0.6 (8.9 percent) to $6.1425 per bushel, the lowest settlement since July 29.

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